Euronext headquarters in the La Défense district of Paris. /Photo taken on November 21, 2019/REUTERS/Charles Platiau
PARIS (Reuters) – European stock markets ended lower on Monday, as poor Chinese economic data weighed on trading, which was also marked by the wait-and-see attitude of investors ahead of the publication of numerous results in the United States this week. In Paris, the CAC 40 lost 1.12% to 7,291.66 points and the German Dax 0.23% against 0.38% for the British Footsie. The EuroStoxx 50 index ended the session down 0.98%, the FTSEurofirst 300 0.58% and the Stoxx 600 0.63%. Many U.S. companies are due to report results this week and next, including the “Magnificent Seven,” seven tech companies whose performance this year has almost single-handedly supported U.S. equity markets. In addition, the US Federal Reserve will meet on July 26 to enact the last rate hike of this cycle, according to market expectations. Caution therefore dominated trade on Monday, especially as investors worried about the slowdown in the Chinese economy. Growth reached 6.3% over one year, well below the consensus which expected growth of 7.3%. “The Chinese economy is well on a rapid slowdown trajectory (…) and needs more support from the government. However, traditional monetary and fiscal policies may not be enough in the current situation, especially due to of the accumulation of public debt”, write the strategists of Natixis. VALUES Luxury weighed on the performance of European indices, with the sector index falling by 4.14%. In France, LVMH, Hermès and Kering posted the worst performances of the CAC 40, down from 1.95% to 3.73%. Richemont, under pressure from worse than expected results, lost 10.43%. The financial sector posted the best performance of the Stoxx 600, having gained 0.20%, with the good results of the Finnish bank Nordea. Argenx soared 31.02%, finishing top of the Stoxx 600, after announcing that its treatment for a chronic muscle disease reduced the risk of relapse by 61% compared to placebo. A WALL STREET The American markets, less exposed to the Chinese economy than the European stock markets, progressed moderately, investors remaining cautious before the publication of many results. At closing time in Europe, trading on the New York Stock Exchange showed no clear direction, with the Dow Jones gaining 0.23%, while the Standard & Poor’s 500 advanced 0.30% and the Nasdaq Composite was up 0.54%. RATES Yields stagnated on both sides of the Atlantic after falling at the end of last week, reassured about inflation in the United States. The ten-year German yield was flat at 2.455%, while the ten-year Treasury yield held steady at 3.8303%. EXCHANGES Like Treasuries, the dollar remained stable against a basket of reference currencies. The euro nibbling 0.07% to 1.1235 dollars, while the pound lost 0.07% to 1.3077 dollars. OIL Oil suffered from the Chinese economic outlook and the resumption of production in two of the three Libyan oil fields shut down last week.
At closing time in Europe, Brent fell 0.96% to 79.1 dollars a barrel, US light crude (West Texas Intermediate, WTI) falling 0.94% to 74.71 dollars.
TO FOLLOW TUESDAY:
(Report Corentin Chapron, edited by Kate Entringer)